Video Game Developers Say That Piracy Really Isn't A Big Threat To Business

from the good-for-them dept

Well this is a bit of a surprise. For all the talk we keep hearing about how piracy is destroying the video game industry, and news stories with video game execs talking up DRM and the threat of piracy, a recent study of video game developers had only 10% saying that piracy was a threat to their business. Plenty were concerned about it as an issue they had to deal with, but most seemed to have some perspective on the relative risk of the threat. In fact, other parts of the survey note that about 50% are adapting to the marketplace, saying that "piracy" will change the way they do business, with it mostly meaning more "piracy-proof" business models. On the DRM front, there isn't a whole lot of interest. 50% called it irrelevant with another 20% describing DRM as a part of the problem. I have to admit I'm a bit surprised by the findings (which makes me wonder a bit about the methodology), but it's nice to see at least some suggestion that developers are adapting, rather than threatening and blaming.

I think you're confusing the developers with the Publishers Mike. Most developers actually have a decent handle on whats actually happening in the industry. Not surprisingly, its upper management at the Publishers who control the purse strings that have lost touch with reality. They only seem to care about putting up a good front for the shareholders and vendors by "doing something" about the "piracy problem".

Well, if by "game developers", they mean the people who actually develop the games and not the individuals how own a development company or (if you really want to get loose with the term) the publishers, then it shouldn't be surprising at all. The people who do the grunt work of developing games are gamers themselves, so they'd be just as annoyed with DRM as anyone else.

From the looks of the TIGA web site, the organization which sponsored the study, it does appear that they're talking about the actual developers. So, yeah, the findings make sense to me.

interesting how some of the findings dismiss drm. wouldnt you consider registering serial numbers when installing computer games as a form of drm? its certainly a bit easier to prevent piracy when a software company can simply not let two of the same serial numbers play on their game servers at the same time.

Software history is often forgotten

People often forget, or are too young to remember, that the software industry already went down the path that the music and movie industries are on now.

Early in the days of consumer software, anti-piracy measures were the norm, not the exception. We had outright DRM solutions, such as dongles (remember those?), anti-copying measures, secret keys embedded in manuals, etc. Some companies still use these, but by and large the industry learned two simple truths:

1) Any form of copy protection creates a problem for paying customers and makes the software more difficult to sell. Adding copy protection reduces the number of paying customers you have.

2) Illegal copies don't hurt that much because most infringers would never have been paying customers anyway. However, they do tell their friends about how great the software is (assuming it's great) and therefore act as salesmen. Also, a not-insignificant minority of infringers end up buying a later version of the software they found indispensible -- so became paying customers in the end.

Significantly, I think, none of this applies to businesses who infringe. This is why you see the BSA still engaging in overly-energetic actions such as raiding businesses, but you rarely or never see them acting directly against consumers.

Why the music and movie industries don't learn from software industry's experience is beyond me, particularly considering the software industry paid a heavy financial price in terms of lost sales, dissatisfied customers, and bad reputations for their missteps in this area.

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Registering serial numbers is used more as a way to track customers than as a method for anti-piracy. The "problem" they solve is that the majority of people who bought software never sent in their registration cards. It's a marketing thing.

As an anti-piracy measure, serial numbers are a weak solution at best. There are too many legitimate reasons that the same number may be used more than once, and if software companies get too hard-nosed about it, they lose customers. That's why they don't actually get too hard-nosed about it. Look at the company who is most eager to use such numbers for anti-piracy: Microsoft. Even they allow the same number to be used several times before acting.

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Wow. Never thought of it that way. Hopefully they'll disclose in their quarterly reporting the number of decommissioned consoles in addition to new hardware sales.
New sales don't necessarily mean new customers as explained with this arithmetic equation:

What I don't understand is this: I click through to the report / press release from Tiga, and the first things I see is this:

Firstly, the majority of video games developers (60%) see piracy as a problem for their business and most also see this as a constant or increasing problem for their business going forward (90%). However most developers view the actual threat of piracy to their business survival as low (60%) with only 20% ranking the threat as medium and only 10% considering the threat to be high (10% had no view).

Now I may be stupid, but it looks like 60% of them consider piracy a problem, and considering an increasing problem. Did I miss something?

This isn't surprising as a gamer...

This is a video game survey, not a PC game survey. Console systems are very much locked down and piracy on them is rare. You generally need to know a guy who knows a guy or trust some sleazy looking website. I bet that has SOME influence on the survey. But it doesn't even matter, video games have always had strong rtb. Patches, access to dedicated servers, and now convenience of digital distribution and downloadable content. All these things make owning an attractive option for video game rather than piracy. Most of the games that bemoan large piracy rates are also those that don't offer a strong reason to buy or even offer a disincentive to buy through DRM.

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Viewing it as a problem and an increasing problem doesn't mean that it's also viewed as a threat to their business.

It just means that it's annoying and gives them headaches. If they're talking directly to the code monkeys then the reason it's a problem is because management is going to expect them to implement some more asinine piece of code that never quite works right and is a hassle to maintain.

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Hulser is 100% correct -- the survey results fully depend on what parts of the development hierarchy they are talking to. Game programmers in particular seem better informed about all the issues with DRM, way more than producers. It's the publishers and producers you have to worry about -- they're the one lot I too often find myself explaining why walled-garden DLC shops feel claustrophobic, why gamers hate DRM restrictions (even if they never intend to go around them), and why first-sale doctrine is a GOOD thing in terms of perceived first-buyer value. Some of them don't even understand how rentals are a good form of advertising -- anything other than a full purchase is immediately regarded as a lost sale. They have one sales hammer, and every consumer is a nail, waiting for their first strike.

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As a minor point of contention, we are talking about the people making the games, not the people selling the games, or at least so I assume. I would imagine a fair majority of those have little to no hand in the budget end of the business, so it would be easier for them to underestimate the impact.

That said, I don't agree with the doomsday piracy types, simply pointing out that there's a chance the poll's targets may not be the best to survey.

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Registering serial numbers is used more as a way to track customers than as a method for anti-piracy. The "problem" they solve is that the majority of people who bought software never sent in their registration cards. It's a marketing thing.

I guess you can take "registering" a couple of different ways, but I took the AC to mean entering a GUID that is printed somewhere on the jewel box during the installation. These games don't (or didn't) "phone home" to confirm the GUID or make sure that you've only installed it so many times. They just run it through a local process that confirms whether the GUID is valid. So, it sounds like you're talking more about the Spore-like DRM.

In any case, is the GUID a form of DRM? I think so, albeit a very light form.

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A) Create these anti-piracy measures.
B) Deal with customer issues.
C) Have an understanding about the technology they're dealing with.
D) In the cases of online games, actually deal with user traffic.

And in the cases of executives they have to deal with:

E) Have their bosses breathing down their necks about needing "unbreakable DRM".

So while it's the executives and marketers that will probably have a better grasp of sales and "demographics", it's the developers who are closer to the action, in touch with the customers almost directly, and it's them who actually understand fully the nitty-gritty of piracy. Hell, I bet most of them WERE pirates before they entered the industry, to some degree.

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Ah, yes, true enough!

This kind of thing is DRM indeed, and a particularly dumb form of it. One project I was involved with used it as way of placating clueless upper management without causing a huge amount of hassle for developers (i.e. increased development costs) or customers. It's useless as DRM so I forgot about it. I think A Keygen wants to say hi.

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Here;s the thing, the question is "threat to their business SURVIVAL". It isn't threat to their business. So they may feel that piracy isa real issue and will impact their business, but not to the point that it threatens their viablity.

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It's kind of the same structure as music in terms of the publishers (labels) and developers (artists).

It could also depend on who they talked to in terms of developers. I'm sure if they're interviewing some of the higher level developers/leads or the people who have a job because of something like DRM, you'll probably find the middle ground between the average developer and the publisher... Like the 50% that seems to think DRM works.

The average game developer isn't far off from most gamers. They buy and play other companies games and see the same kinds of things we do.

Not really a good find...

Mike, here's an analogy for what you're more into (I rarely see video game articles here, but tons of music industry ones)

You basically found a survey asking music artists do they feel music piracy threatens their livelihood?

They almost in majority respond "Not totally, because the record company makes most if not all the money on sales, we mostly get paid to do shows and make music."

Developers are the same way, they're the companies who get paid to be there, to make the game. They will get paid the same amount regardless of sales, although if in the IMPOSSIBLE event that sales rates were so low because of piracy, their publisher might not fund them for another game because they look unsuccessful. But like I said, that's impossible, profit has to be much much lower than the investment in the project for the publishers to turn a blind eye to greed and drop a potential sequel or future partnership. This is why the developers only had 10% saying it was a threat to their survival, because most recognize as long as they put out their intended product, they'll be secure then and in the future.

Now, if you could find a survey which says publishers or record labels, the ones who make money on sales, agree in majority piracy isn't bad, I'd be in utter shock.

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I don't see how that would be a useful metric at all. A more useful wighting would be one that reflected ROI. Cost of production vs revenue. "Units sold" is unimportant except in terms of how it affects the revenue curve.

Re: Not really a good find...

"They will get paid the same amount regardless of sales"

Not actually true. Every company I've ever worked for, and the company I own and operate, compensates according to sales. True, the baseline salary is a constant (although if the company isn't making enough money, layoffs happen), but if software is selling well, bonuses and, in the old days, stock, get paid to developers. And believe me, the developers know this.

If piracy was a huge deal, the base payrates would be lowered, the bonuses wouldn't happen, and worst-case, jobs would be lost. Developers are less insulated from the realities of business than employees of many other businesses.

Re: This isn't surprising as a gamer...

1) Piracy has virtually no impact on developers. It does however have an unclear impact on publishers, which is not the topic of the survey.

2) Piracy rates are significantly higher on the 360 as opposed to the PC because piracy is easier on the 360 for a few reasons.

A) It maintains the appeal that if the disc runs, the console will play it well, no hardware troubles or compatability issues.
B) You keep the game on a disc rather than wasting valuable hard drive space on your computer for all the games you could pirate on the PC.
C) I'm going to be vague about this one to not stir up trouble, but once you get on the right track to pirated games on the 360, you are guaranteed all of the same benefits a legitimate buyer has with significantly less thought and effort to achieve that than a PC game. There is virtually no DRM.

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I'd like to point out that I hate Steam. While it's less annoying than the vast majority of options out there, I despise the fact that the bloated peace of software has to run and get online before I can play a game that I legally purchased. I have the original DVD, I have the key, why the hell do I have to go online every single time I want to play the damn game?

Where as, if I pirate it, I don't have to worry about that at all. Doesn't seem to make anything harder to be a pirate.

DRM is in no way shape or form to prevent anyone from downloading the software. It's to prevent people from copying it in the first place. As we can see from any search on The Pirate Bay or a thousand other torrent sites, DRM douse not work. When there are so many people who get more fun out of cracking the DRM than playing the actual game, DRM douse not work.

Thus, since it's not in any way shape or form annoying to be a pirate, and it can be annoying to be a legitimate user, you are wrong.

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Actually I think the DRM and game devs are separate beasts.

Someone like Maxis develops a game (Spore for example). Securom is the one doing the DRM. Sure Maxis needs to implement it in the game but the DRM is written and sold by Securom, probably at the request of the publisher.

I wouldn't call Securom game developers is all I'm saying but as I said in my other post, if they were included in interviews, I'm sure they contribute to the numbers that say DRM works. :)

Re: Re: This isn't surprising as a gamer...

Point number one I can see but you are strait up wrong on point number 2. With paying burned games on the 360 you have to go threw quite a few checks to make sure it will play and won't get you banned. And as we can see from the recent 1 million banned mark recently reached, that doesn't work ether. PC games, on the other hand, once they are cracked that's it. It takes vary little effort on the part of the end user to get it to work. And they get hacked to not phone home so there is no future risk of repercussions.

PC piracy is much more prevalent than 360 piracy. There are probably more cracked copies of windows than total 360s.

Re: Re: Adapting

DRM is like armor, but as modern combat shows us it's easier to make a better bullet than there is to build a better armor.

your analogy implies that the protection scheme is somehow defeated with a superior force. cracking DRM doesn't work that way. a better analogy would be lockpicking, or key copying.

at the risk of sounding pointlessly academic, DRM circumvention in games is a matter of reverse engineering, not brute force. in most cases, it's not cryptanalysis (breaking encryption), it's getting the guts of a program with a valid key into a debugger, watching the game validate, and then figuring out how to either route around the validation step or generate keys that will satisfy the validation procedure.

keygens and cracked exe's are common techniques for circumventing DRM. the DRM code (the armor in your analogy) is completely intact in a cracked game, much like a lock that has been picked. the drm code just not called into play, either by a spoofed key that fools the validation check or a modified executable that skips the validation routine.

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True, but if there's a used game market, people might be willing to pay a few quid more for that new game because they know they can sell it back later on. Mike claims there are studies showing a healthy secondary market boosts sales in the primary market. I haven't read them, but it does make sense.

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I'm among those just like you who simply do not buy games anymore... however it has to do more with the fact that I'm completely disappointed with the quality of the games being developed (and rushed by producers).

I hate DRM, and see no point in any of it. No DRM method is foolproof, including Steam and other online validations. It is something that the software gaming industry has STARTED to realize, but no turn-around has yet taken place. There is no evidence of the publishers understanding the reality that DRM reduces future sales.

I paid for zero games in 2008-2009 and have plans to buy only one game in 2010. The industry has done a great job alienating me as a paying customer and convincing me not to spend my money on their products.

Someone should tell neoqb so they take the logon requirement out of Rise of Flight. It's really a pain in the tucas since they apparently don't monitor the logon servers and outages seem to take a while to resolve.

Also Mike should look at their business model - at $7.62US an aircraft this sim should eventually clock in at about $200 a seat....

Cost-benefit of pirating

I agree wholeheartedly with Anonymous Coward: you can't stop piracy, but you can make it a pain. If it is more of a pain to commit piracy than to simply buy the item, the market will do its own natural cost-benefit analysis and start buying again. If anti piracy measures are a pain for consumers, the opposite will happen. This is a crucial element of game development.

Cost-benefit of pirating

I agree wholeheartedly with Anonymous Coward: you can't stop piracy, but you can make it a pain. If it is more of a pain to commit piracy than to simply buy the item, the market will do its own natural cost-benefit analysis and start buying again. If anti piracy measures are a pain for consumers, the opposite will happen. This is a crucial element of game development.